Client money protection FAQs: Everything landlords need to know about client money protection
As of 1st April 2019, client money protection will become mandatory for the UK’s lettings agents. From the first of the month, any business that manages rented properties will need to belong to an approved client money protection scheme to protect landlord money, or risk being fined up to £30,000.
While the law applies to letting agents, it has serious implications for landlords, too. Working with an agent who does not belong to an approved scheme will put your money at risk—which could spell lengthy court cases with no guarantee that your rental income will be retrieved.
Landlords need to stay informed to ensure that they and the agents they work with comply with the law. With that in mind, here’s everything that you, as a landlord, need to know about client money protection.
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How can I be sure my choice of agent is a client money protection scheme member?
A good letting agent should already be aware of client money protection. If they are a member of a body like ARLA, RICS, NALS or UKALA, they will have access to client money protection through their membership.
In addition, Client Money Protect – part of Hamilton Fraser –
has been running a voluntary scheme since 2014 and protects the money of over 800 agents.
The government will announce the first schemes to have been authorised to provide client money protection following its mandatory introduction imminently.
Are there certain client money protection standards that a letting agent should adhere to?
With our Client Money Protect membership, yes. All client money covered by the scheme should be held in a separate designated account. They must also comply with our minimum professional indemnity insurance requirements, and be continued members of a recognised consumer redress scheme.
They must also agree for us to display their membership details on our website, agree to our terms of membership,
and clearly display the CMP logo prominently within every single one of their lettings branches.
In addition, they must provide you as the landlord—as well as your tenants—with comprehensive information about client money protection and their membership of our CMP scheme.